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Daqo New Energy (DQ)
NYSE:DQ
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Daqo New Energy
(NYSE:DQ)
44Neutral
Daqo New Energy (DQ) vs. S&P 500 (SPY)
Market Cap
$1.19B
Dividend YieldN/A
Average Volume (3M)931.15K
Price to Earnings (P/E)―
Beta (1Y)0.77
Revenue Growth-55.42%
EPS Growth-195.06%
CountryUS
Employees5,765
SectorTechnology
Sector Strength48
IndustrySemiconductors
Share Statistics
EPS (TTM)-5.20
Shares Outstanding66,007,454
10 Day Avg. Volume766,625
30 Day Avg. Volume931,147
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.67
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$23.25Price Target Upside24.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Daqo New Energy Business Overview & Revenue Model
Company DescriptionDaqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufactures in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is based in Shanghai, the People's Republic of China.
How the Company Makes MoneyDaqo New Energy makes money primarily through the production and sale of high-purity polysilicon to solar manufacturers. The company sells its product to major solar wafer manufacturers, who then use it to produce solar cells and modules. Daqo's revenue streams are significantly influenced by polysilicon prices, production volumes, and long-term supply agreements with key clients. The company benefits from economies of scale and technological advancements that enhance production efficiency and cost-effectiveness. Additionally, strategic partnerships with industry players and a strong focus on maintaining high-quality standards contribute to Daqo's earnings and market position.
Daqo New Energy Financial Statement Overview
Summary
Daqo New Energy's financial performance shows significant challenges, with operational difficulties leading to negative revenue growth and cash flow issues. While the balance sheet remains strong with high equity and no debt, the negative trends in income and cash flow pose serious risks.Income Statement
Daqo New Energy's income statement shows a challenging period in the TTM (Trailing-Twelve-Months) with a negative gross profit margin and significant net losses, indicating operational difficulties. Revenue declined sharply from the previous year, highlighting volatility in financial performance. Despite past profitability, the current trajectory raises concerns about sustaining revenue and profitability.45
Neutral
Balance Sheet
The balance sheet remains strong with a high equity ratio and no debt, indicating financial stability and low leverage risk. However, the decline in total assets and stockholders' equity in the TTM suggests potential headwinds affecting asset management and equity value. The company's financial health is supported by a substantial cash position, providing a buffer for future uncertainties.70
Positive
Cash Flow
Cash flow analysis reveals significant challenges, with a large negative free cash flow in the TTM due to high capital expenditures and negative operating cash flow. The negative free cash flow growth rate indicates strained cash generation capabilities compared to previous periods. The cash flow situation could hinder the company's ability to invest in growth or handle financial obligations.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.31B | 2.31B | 4.61B | 1.68B | 675.60M | 349.99M | Gross Profit |
| -60.47M | 920.65M | 3.41B | 1.10B | 233.99M | 80.10M | EBIT |
| -219.51M | 783.43M | 3.04B | 1.05B | 120.08M | 47.48M | EBITDA |
| -46.34M | 932.32M | 3.15B | 1.13B | 188.76M | 95.70M | Net Income Common Stockholders |
| -111.70M | 429.55M | 1.82B | 748.92M | 129.19M | 29.52M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.05B | 3.04B | 3.53B | 1.00B | 76.60M | 51.84M | Total Assets |
| 7.43B | 7.43B | 7.59B | 3.34B | 1.24B | 1.20B | Total Debt |
| 0.00 | 0.00 | 20.69M | 0.00 | 243.09M | 381.46M | Net Debt |
| -3.05B | -3.04B | -3.50B | -723.97M | 166.49M | 329.62M | Total Liabilities |
| 960.44M | 978.58M | 948.24M | 672.53M | 440.23M | 634.20M | Stockholders Equity |
| 4.76B | 4.76B | 4.85B | 2.17B | 767.12M | 566.64M |
| Cash Flow | Free Cash Flow | ||||
| -1.78B | 429.20M | 1.22B | 130.16M | 91.41M | -104.64M | Operating Cash Flow |
| -257.88M | 1.62B | 2.47B | 639.10M | 209.70M | 180.99M | Investing Cash Flow |
| -1.99B | -1.20B | -1.00B | -782.00M | -118.49M | -261.83M | Financing Cash Flow |
| -241.89M | -795.40M | 1.47B | 736.23M | -95.47M | 102.33M |
Daqo New Energy Technical Analysis
Negative
18.62
Price Trends
19.56
Negative
19.78
Negative
18.67
Negative
Market Momentum
-0.29
Positive
44.62
Neutral
21.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DQ, the sentiment is Negative. The current price of 18.62 is below the 20-day moving average (MA) of 19.43, below the 50-day MA of 19.56, and below the 200-day MA of 18.67, indicating a bearish trend. The MACD of -0.29 indicates Positive momentum. The RSI at 44.62 is Neutral, neither overbought nor oversold. The STOCH value of 21.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DQ.
Daqo New Energy Risk Analysis
Daqo New Energy disclosed 70 risk factors in its most recent earnings report. Daqo New Energy reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Daqo New Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $13.79B | 10.72 | 17.62% | ― | 26.75% | 55.24% | |
69 Neutral | $1.16B | 15.66 | 2.78% | 14.05% | -11.91% | -87.40% | |
68 Neutral | $8.15B | 84.20 | 11.30% | ― | -41.92% | -76.24% | |
58 Neutral | $22.44B | 10.62 | -18.43% | 2.37% | 4.68% | -25.09% | |
53 Neutral | $642.23M | 18.04 | 1.34% | ― | -21.68% | -99.75% | |
46 Neutral | $1.49B | ― | -73.12% | ― | -9.83% | -71.44% | |
44 Neutral | $1.19B | ― | -7.57% | ― | -55.42% | -195.06% |
* Technology Sector Average
Performance Comparison
DQ
Daqo New Energy
18.62
-7.72
-29.31%
CSIQ
Canadian Solar
9.76
-8.22
-45.72%
ENPH
Enphase Energy
62.77
-46.58
-42.60%
FSLR
First Solar
131.46
-21.70
-14.17%
JKS
JinkoSolar
20.70
-0.15
-0.72%
RUN
Sunrun
6.56
-4.72
-41.84%
Daqo New Energy Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -14.94% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Negative
The earnings call highlights a challenging year for Daqo New Energy with significant declines in revenue and prices, leading to negative margins and asset impairments. Despite these challenges, the company maintained a strong balance sheet and worked on optimizing costs. However, the lowlights, including reduced utilization rates and significant financial losses, outweigh the highlights, indicating a difficult market environment.Highlights
Increase in Polysilicon Production Volume
Daqo New Energy achieved an annual polysilicon production volume of 205,068 metric tons in 2024, meeting the guidance of 200,000 to 210,000 metric tons, marking a 3.7% increase from 2023.
Strong Balance Sheet and Liquidity
The company maintained a strong balance sheet with a cash balance of $1 billion, short-term investments of $10 million, bank notes receivable of $55 million, and a fixed term bank deposit balance of $1.1 billion, totaling $2.2 billion in quick assets.
Cost Optimization Efforts
Relentless efforts to improve operational efficiency resulted in a cash cost decline by 6% quarter-over-quarter to $5.04 per kilogram.
Lowlights
Significant Revenue and Price Decline
Revenue fell from $2.3 billion in 2023 to $1 billion in 2024 due to a sharp decline in polysilicon ASP from $11.48/kg in 2023 to $5.66/kg in 2024.
Negative Gross Margin and Asset Impairment
The company recorded a negative gross margin of 20.7% for 2024 and a non-cash long-lived asset impairment charge of $175.6 million.
Reduced Production and Utilization Rates
Due to weak market prices, the company operated at a lower utilization rate of 40% to 50% of capacity, with expected production volume for 2025 significantly reduced to 110,000 to 140,000 metric tons.
Net Loss and EBITDA Margin Decline
Net loss attributable to shareholders was $345 million for the year, with an EBITDA margin of negative 32.9%, compared to a positive margin of 39.8% in 2023.
Company Guidance
During the Daqo New Energy Fourth Quarter 2024 Results Conference Call, the company reported a challenging market environment due to excess capacity in the solar PV industry, which led to significant price declines. The company's annual polysilicon production volume reached 205,068 metric tons, meeting their guidance of 200,000 to 210,000 metric tons, with a year-over-year increase of 3.7%. However, the average selling price (ASP) of polysilicon fell drastically from $11.48 per kilogram in 2023 to $5.66 per kilogram in 2024, causing revenues to drop from $2.3 billion to $1 billion. The company recorded a negative gross margin of 20.7% for 2024 and a non-cash long-lived asset impairment charge of $175.6 million due to falling ASPs. Despite these financial challenges, Daqo New Energy maintained a strong balance sheet with $1 billion in cash, $10 million in short-term investments, and $1.1 billion in fixed-term bank deposits. Looking ahead, the company anticipates a total polysilicon production volume of 110,000 to 140,000 metric tons for 2025, maintaining low utilization rates amid ongoing industry challenges. The company remains optimistic about the solar PV industry's long-term demand prospects, emphasizing their focus on enhancing higher efficiency N-type technology and optimizing cost structure to navigate through the downturn and capture future growth opportunities.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.